Plaintiffs in a lawsuit challenging Arizona’s new employer-sanctions lost a key legal battle on Dec. 7, but plan a new legal attack that could still win the war.

On Dec. 7, U.S. District Judge Neil Wake released a 25-page decision stating in part that the twelve plaintiffs wrongly sued the state of Arizona. Instead, Arizona’s 15 county attorneys should have been the defendants.

The legal challenge is to the Legal Arizona Worker Law scheduled to take effect on Jan. 1, 2008. The Arizona Legislature-passed measure was signed into law by Gov. Janet Napolitano just days after Congress dropped the ball on federal immigration reform.

Under the new law, Arizona employers that “knowingly” or “intentionally” employ an unauthorized worker on or after Jan. 1, 2008 could lose their Arizona business licenses. Found guilty once — an employer’s business licenses could be revoked for 10 days. If found guilty twice, permanent license revocation would occur.

“The Court did not uphold the law, but it did dismiss the case without prejudice,” according to the Arizona Farm Bureau, a lawsuit plaintiff and the single group representing Arizona agriculture in the legal challenge. “The Court’s decision is not a final decision on the merits of the claims and is not a decision on the constitutionality of Arizona’s law.”

Plaintiffs are evaluating two actions, Farm Bureau said. First, file a new lawsuit to gain a temporary restraining order to halt the law’s effect based on the required use of the E-Verify employment eligibility program by employers, and stop the enforcement and prosecution of employers who knowingly employ or hire undocumented workers.

Second, the plaintiffs could appeal Judge Wake’s decision to the Ninth Circuit Court of Appeals.

E-Verify is a federal program where participating employers electronically verify the employment eligibility of newly hired employees.

Many of Arizona’s 150,000-plus employers, including those in the farming sector, have delayed E-Verify enrollment pending Judge Wake’s decision. The question is whether employers should register for E-Verify now or wait for the next legal challenge and decision.

Employers can learn more about E-Verify during online classes held each Thursday at 11:00 a.m., conducted by the Arizona Chamber of Commerce and the Department of Homeland Security (DHS). To register for the class, send an e-mail to info@azchamber.com.

If an employer enrolls in E-Verify and a lawsuit nullifies the E-Verify requirement, the company can cancel its participation with a 30-day notice in writing to DHS.